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M&A business leader and author, Michelle Seiler Tucker joins the show to discuss several very important things you need to know, regardless of whether you’re just getting started or have been in business for many years. We cover important keys to consider that you’ll be glad to hear!

AUTO-TRANSCRIBED – PLEASE FORGIVE TYPOS AND ERRORS

Aaron Spatz  00:00

You’re watching America’s Entrepreneur on Youtube. Welcome to the show. I’m your host, Aaron Spatz. And each week we interview entrepreneurs, industry experts, and other high achievers as a detail their personal and professional journeys. Before we jump in, hit the subscribe button and be sure to hit the bell icon so you’re notified every time we release a new episode. Thank you so much for tuning into America’s entrepreneur. I’m so excited that you’re here. I’m excited to just again, welcome and just in brings just amazing guests to the show that can be a massive encouragement to you. incredible value add. And so today will be no different. So I’m really excited to introduce to you Michelle Siler Tucker, Michelle comes to us from well, one, I’m going to go ahead and just do this up front, I would love for you to go check her book out exit rich, you can go to exit Rich book.com. To learn more information she co authored that was Sharon Lechter. And you can see so much more about the way to set your business up for success and set yourself up for success as you go to exit. And so just a quick bio for her. So she’s the founder and CEO of solar Tucker International, that she holds several certifications that you would definitely want to know that she holds given her area of expertise. She’s owned many businesses across many different industries. She’s worked in the m&a industry mergers and acquisitions industry for over 20 years. And she’s a leading authority on buy, sell, fix grow. And her and her firm. This is this is particularly interesting as they’ve sold over 1000 businesses across nearly every vertical. And so Michelle, I just want to welcome you. Thank you so much for being on the show today.

Michelle Seiler Tucker  01:34

Thanks, Aaron. Thanks for having me.

Aaron Spatz  01:36

You got it. So I would love to go back to the beginning. Like let’s go back to the start of your story and just help help us all understand where like, where did the business journey for you start? Like where where did this all come from?

Michelle Seiler Tucker  01:50

And a pretty young age, I had decided, you know that I didn’t think I was gonna make a great employee because I don’t like to be told what to do. Anyway, on my clients tell me what to do. You know that my clients, not a supervisor anyway. So I’ve always been interested in entrepreneurship. I’ve owned many different businesses and different verticals. I did get recruited by Xerox, and was with him for about six months. My nickname was the closers because every time someone can close a deal, they’re like, give a shout, Adele, she’s the close. And then they promoted me too high volume while they actually promoted me within six months to regional vice president over 100 different sales reps, I had to interview for that and everything else, but they promoted me and I realized very quickly that I didn’t like it. I like management for a fortune 500 company because I felt like it’s so much paperwork, it’s paperwork intensive. And so many meetings, you know, schedule meetings to schedule follow up meetings to schedule more meetings. And I love cells. I love finding out what my client’s problems are. I’m solution oriented. I like making things happen. You know, I don’t like sitting behind a desk and just pushing paper all day long. So I so I started looking for other opportunities. I ended up starting my own franchise development franchise trading franchise sells company. And it was partners with some different franchisors and selling hundreds of franchises. But I wasn’t just selling franchises. I was doing everything I was doing a consultant I was doing the development. And then I ended up I ended up transition into m&a because I have so many existing businesses come to me and so many buyers come to me and say, Hey, Michelle, give me businesses I could acquire because that’s a pretty big name for myself in the franchise world. And right now, we don’t have existing businesses. That’s not what we do. And I’m like, why don’t I can’t say no, I should be saying yes, yes, yes. And at that point, I decided to transition not you know, I really transitioned out of franchising, but that’s when I opened up my m&a practice. Interesting. And that was a little over 22 years ago. 21 know, a little bit, I’m sorry, a little over 20 years ago.

Aaron Spatz  04:11

Okay. Well, I mean, that’s, that’s a very, it’s a very interesting background, a really, really cool story. So we’ll dive into the sales side of this because this is a common theme I see time and time and time again, with with people that have been incredibly successful in business, is they have some foundational elements of sales that just makes them makes them run makes them successful and and really helps them drive drive results. And so I definitely, I can definitely tell you that that’s been a big part of your story, right. But then the other part of that, I think, was, as you’re working with, with with franchises and doing and doing all the work that is associated with that. You’re building your network, you’re getting exposure to a whole bunch of different verticals, I’m sure lots of different people and so then it was just that. This is me just making just a quick, quick take on this one, but it seems to me that you You identified that opportunity you saw like, okay, there’s, there’s something going on here people are people are coming to me. And that and that sales background that you’ve had really kind of helped you. You know what I need to go check this out need to go dig into that. So like, what? Where did the sales part of your background come from? Like where like, is that? Is that just been the way you’re wired? Since you were since you were little and it just kind of carried you through into business or massive training or something?

Michelle Seiler Tucker  05:27

Well, I think it was a little bit the way I was wired. Okay. But I also went to Dell Carnegie sells course. And then I ended up teaching Dell Carnegie sells course for three. That’s really helped. Yeah, so and then I, you know, I had cells before. I mean, look, entrepreneurs, what are they? They’re salespeople, right. They’re selling. They’re selling the bank to give them money. They’re selling, you know, clients to invest or investors to invest with them. But yeah, I did. Dale Carnegie for about three years, I taught Dale Carnegie, I went through the course I’m like, You need to teach a course. So I taught Dale Carnegie. And I went to the Xerox training course, as well, sales course. And I think, you know, Xerox has some of the best training in the world

Aaron Spatz  06:11

or do their very well, for me in a world renowned program for sure.

Michelle Seiler Tucker  06:15

Yeah. So I went to several different training programs with Xerox and probably other training programs along the way. But the biggest one was Dale, Carnegie and Xerox.

Aaron Spatz  06:25

So then, so then let’s let’s make this actionable for the entrepreneur listening to this. So for those that are maybe not as strong at sales, but yet they’re wanting to grow a business? And what would be your advice that hey, get get signed up into some type, of course, like this, like get the training that you need, instead of fumbling around? Like, is that? Is that the direction that you

Michelle Seiler Tucker  06:46

know, I know, because if it’s an entrepreneur and their strengths are not cells, why would they try to go into cells and try to fit a square peg into a round hole? That’d be something or not, you know, I always tell my entrepreneurs and my business owners, focus on your strengths, hire your weaknesses, if you’re not good at sales, maybe get a good salesperson, good, good salespeople. I mean, and that’s a hard question to answer because it depends on what are they doing? Are they a solo entrepreneur? If they’re a solo entrepreneur, and maybe they they need cells? If they’re not solo, then I would say, you know, look at people on your team or a hire, I always tell my, my entrepreneurs focus on your strengths or your weaknesses. Maybe hiring somebody who’s really good in sales. Sure. You know, I this was a long time ago, because I was in sales. And I always knew I would be in sales and entrepreneur, but not a lot of entrepreneurs are not salespeople. It just depends.

Aaron Spatz  07:41

Yeah. Yeah. That’s great advice. So So let’s so then let’s, let’s, we’ll talk about the book here now briefly, and then we can talk more about it later on as well. But like, give it give us, give us a little bit of the story behind the book, what what inspired you to write it?

Michelle Seiler Tucker  07:55

Sure. So excellent, which is actually my third book. So as a little girl, I always knew that I was going to be a writer. I always knew I was going to be an entrepreneur. And I love people. So I always knew I was going to do something around people. But my first book now I’ve written lots of poems, lots of songs, and everything else. My very first book book that I wrote that we published, was in 2013, called sell your business for more than it’s worth. And then I wrote excerpt rich in 2019, one of the biggest reasons for exit riches because when I wrote saw your business for what it’s worth in 2013, and did the research, I learned that about 90% of all startups fail. Right? We all know that. That’s common knowledge. But then, you know, I saw businesses all over the US and I started looking at strip centers. I’m like, that strip center was full. Two months later, it’s empty. And I’m like, What’s going on here? And I started doing research for exit rich, and I learned that the business landscape had flip flopped, I was actually fell out flabbergasted to learn that is completely flip flopped. Now startups are not at great risk anymore. Only 30% of startups will go out of business. Well, there’s 30 point 2 million businesses in the United States employing over half the US workforce. But our small business small business is the backbone of our economy. That’s true. out of 27 point 6 million businesses and some change. Those businesses have been in business for 10 years or longer. 70% of those companies will go out of business 70% That’s crazy. Those that is crazy. Those are startling statistics. Yeah, you know, and you hear about the big public companies all the time like Toys R Us and business. 75 years goes out of business, Kmart Stein, my pure one Godiva closing down 1500 locations, but the media only talks about the big public companies. Now talk about the private businesses on every street corner in every town in every state across our great nation. These business owners are exiting pour. They’re selling for pennies on the dollar. Closer business or even worse filing bankruptcy. And unfortunately, when you file bankruptcy, most business owners are gonna lose business assets and personal assets. Because most of them commingle assets and pierce the corporate veil. So that’s why we’ll exit rich, you know, to say, look, there’s a better way here, these businesses don’t have to go out of business. The number one reason that businesses are going out of business is because a lack of aim, aim is always innovate and market they stop innovating Toys R Us did nothing new and 75 years. You know, Blockbuster had the opportunity to buy Netflix twice.

Aaron Spatz  10:37

Yeah. But blockbuster is such a fascinating story. And when you when you hear when you hear those discussions about that, it’s just it’s I looking back on it, right hindsight being 2020. It’s just it’s it’s hilarious to think about that, right? And think about like, what, what what a deal blockbuster could have had, right, and then just completely own the market. That’s

Michelle Seiler Tucker  10:56

a problem with a lot of owners and a lot of CEOs. I mean, they just, they just get tunnel vision. And they want to keep doing things the way they’ve always done them. And sometimes it’s arrogance. And you know, Toys R Us and 20 always say businesses have life cycles, just like humans do. And when you should be selling businesses, when you’re in it’s in its when it’s in its prime. And in 2015, Toys R Us is doing $11.5 billion in sales. In 2016. One year later, they filed for bankruptcy. So you know, you go from adult because it’s all is when you’re in your prime, that’s when you should sell your business, after all, is what senior citizen we all get, unfortunately. So so they go from adult winner prime in 2015 11 Point 5,000,000,020 16. They go to senior citizen level, and they file bankruptcy was after senior citizen death 2017 Two years later, out of doing $11.5 billion in sales. They close up 1500 locations all their stores in 35 different countries and are completely out of business.

Aaron Spatz  12:01

That’s crazy. That’s crazy. Yeah. So you’ve I mean, you’ve you’ve seen a ton right? Over the last 20 years since since you’ve had your practice, you’ve gotten to interact with 1000s of business owners, you’ve gotten to see both sides of the transaction, which is very, that’s a very unique perspective. Right? So what what are some things that people on the buy side or on the sell side or both, that you think people really do need to pay attention to? And maybe things that are just they’re not talked about near enough?

Michelle Seiler Tucker  12:31

Yeah, I would say I would say both sides. But let’s let’s focus on the south side for a minute. Steve Forbes says the 80. So you already heard that 70% of businesses will go out of business, right? Here’s another striking statistic, Steve Forbes who endorsed exit read, Steve Forbes says 80% of all business on the market, businesses on the market would never sell. That means only 20% of businesses are selling, that’s just scared. That’s just scare people. That’s just scared business owners, the only 20% of our selling and the number one reason for that there’s so many reasons, but the number one reason for that is because business owners, they don’t think about selling your business, they don’t plan your exit, they think about oh, this is my baby. Yeah, I’m gonna run this forever. Your business is not your baby or babies are at home, go home, love them can sell your businesses, your valuable assets, kind of like your financial portfolio with their financial advisor, you know, saying Oh, that’s my baby. Don’t ever sell stocks, hold on, hold, hold. Now you’re telling the advisor, buy, sell, do whatever you need to do to grow my investment portfolio, right? So business owners don’t think about selling and how a catastrophic event occurs and as typically internal or external interact to be holidays, his partner disputes divorce death, externalise this pandemic or in or business not doing well, that burned out and has a last last time. I mean, I’m sorry, that’s a lot and you never want to sell during a catastrophic event. Right? We should still sell when your business is up, not down. And when you’re trying to sell during a catastrophe, you’ll never be able to maximize value. The other reason that businesses are not sellable, is because most business owners build a glorified job and want you to go to work every day, versus a business that works for them. And the businesses 1,000% dependent upon them. buyers aren’t buying jobs, right? Buying businesses, any any other big reason is that there are more buyers, for businesses that have an EBIT of over a million. So there are more buyers for what I call good businesses, and are actually good businesses to buy.

Aaron Spatz  14:33

That’s interesting. So so the supply of good businesses to purchase are incredibly low, but it’s because people aren’t, they’re just not going and taking the time to sell their business. So what’s the alternative?

Michelle Seiler Tucker  14:46

They’re taking the time to sell their business that is one of it, but they’re not taking the time to build a business up somebody wants to buy

Aaron Spatz  14:51

see Yeah, so So before we go there so what what are they doing that are they are they just shutting it down? They just they just cease operations and

Michelle Seiler Tucker  15:00

Well, like I said earlier, business owners are selling for pennies on the dollar closed in a business or even worse, sell them for pennies on the dollar. Or Aaron, they want to sell their business and like, Okay, I want to sell my business, and I want to sell it for $10 million, and a business is worth a half a million dollars. So the businesses are also not sellable. Because they’re not sellable for the vise exit, the owner needs to enter the next phase of their life. So if the owner wants to retire, now owners come to me all the time and say, show I want to sell my business and always take their temperature and see how realistic they are. And I’m like, How much do you want for your business? And let’s say I want $15 million? Well, great, how’d you come up with that number? Cuz I know that there even is $200. I’m like, How’d you come up with that number? Oh, that’s what I need to retire on. Or that’s what I need to buy, start my next business, you know, or that’s what I need to send five girls to college and pay for five girls weddings, it’s always about what they need, never about what the business is actually worse. So we have to bridge that gap. You know, I have to sit down work with our clients and figure out help them figure out, okay, you don’t really need 15 million, maybe you can get by with 5 million, you know, this year, this Oh, you can live this long, because now we run the numbers for them. So that’s one of the number one reasons that businesses don’t sell. And so also because there’s so many buyers, for larger businesses, the buying power is really small for the businesses under a million dollars. And a lot of times they just sit on the market. And that’s why 80% of them never sell

Aaron Spatz  16:31

insane. Yeah, that’s absolutely nuts. Yeah, it really is a tragedy too, because you got people have spent their entire lives building something up and only to practically give it away. Right? Or they’re or they’re being leveraged out because of some, like you said earlier, some catastrophic thing that’s going on internal or external. I mean, I I cannot imagine what all you’ve seen just over the last year and a half, with with businesses and all that’s all that’s been impacted. It’s it, I’m sure it’s been nuts.

Michelle Seiler Tucker  17:00

It has been nuts. And you know, it is sad, like you said, and that’s really why I wrote so rich, because if you think about I mean business owners, they pour their life savings, their their time, their energy, their efforts and and make huge sacrifices along the way I just talked to a business owner the other day is like Shawn, I had a vacation nine years. And he goes, I never go to my kids soccer games, basketball games, football games, because I’m always working well. That’s not why we go into business in the first place. We go into business for a better quality of life. We go on business for freedom, you know, and flexibility. And so many entrepreneurs are just handcuffed to their business, unfortunately, because they haven’t built a business. So exa Rich is all about Yes, Maria was so rich, about extra riches all about not just selling your business. So you know, if you’re not thinking about selling your business, you say, Oh, I don’t need that. Because I’m not thinking about selling my business, you do need extra rich, because extra rich is all about building a sellable asset. And when it’s time for you to sell your business, if you if you don’t follow the steps, you know, you might have a hard time. So exit Rich is all about starting with the end in mind, like Stephen Covey says, start with the end in mind, we teach our readers our clients how to build their accent there, we call it the GPS exit model from day one, buying or starting a business. Because that’s the biggest problem is that business owners don’t think about their exit, they don’t plan to fail, they fail the plan. And then it’s all about building the proper infrastructure, or what I call the six PS, six cylinders. And most businesses Aaron are not running on all six cylinders are running on maybe two or three. And so when buyers look at buying businesses, then they look at the six owners, is this business have the right people? Is this business in a product? It’s all the way up on the way out, you know, is it thriving, did that processes have systems in place, didn’t have proprietary assets provide your assets is the number one value driver and can take you from a five to six to eight to 10? Multiple? Do they have patrons they have, you know, the customer diversification cause for concentration? And most businesses have customer concentration, unfortunately. And then they and then they look at profits, how profitable is the business? So they look at that infrastructure? When you’re looking at businesses and that’s what we look at when we evaluate businesses and that’s what buyers should be looking at the most educated buyers there’s five types of buyers, most educated buyers do look at the six pieces six cylinders.

Aaron Spatz  19:25

Okay. Yeah, I mean, and that’s a lot for folks to consider, especially those that are maybe earlier on in their, in their journey to the point that you made just a couple minutes ago is like people get so wrapped up and so focused on the day to day the like they don’t even think about or even imagine a day where they are they might want to sell and I mean it was it was a brilliant point in a really good contrast. Like you wouldn’t do that like you. You would you would manage your business differently if you viewed it as an asset. Just like instead of your maybe writing the point you made earlier, which I thought I thought was brilliant, that’s a great, that’s a great way to I think, snap people back to reality like this is an asset that should be working for you, not you for it, and in putting it in a position where you are able to sell and so that, and that’s really what what you’re after here, right as you’re trying to help people. Like, there’s, well, I won’t put words in my mouth, but you’re trying to get them into a point where they don’t have to scramble the last minute to try to get things figured out and to make it sellable. You’re trying to help them on the front end, build the systems get the things in place, that way, it’s already heading that direction. Is that right?

Michelle Seiler Tucker  20:37

Yeah, I mean, we work with clients, really two different ways. You know, I know, it really depends upon what stage the client is, you know, we’ve got clients that come to us and diagnose for cancer, and they don’t have the time to, to build the business to sell, so they got to just sell. So it really depends upon the mindset, you know, that the health, the Mental Welfare of that owner, dictates what direction we’re going. But a lot of times owners will come to us to sell their business, and maybe they have three cylinders or four cylinders. We help them tweak those other two, while we’re getting why we’re evaluating the business for packaging the business over doing everything to get the business on the market. You know, after early like you just mentioned, I always say it’s best to start with a clean slate. So it’s not negative that you’re starting, all right, it’s actually positive. Because you can get accelerator you can call me or talk to anyone on my team, and we can help set you up for success. And you can build your business the right way, a smart way. So that is sellable. When you’re ready to sell people have to but business owners have to stop thinking, oh my gosh, I’m gonna keep this business forever, because nothing lasts forever. Look at Toys R Us. Nothing lasts forever. We don’t last forever. Yeah, you know, and there’s five ways to exit your business and the ways that we used to, you know, the business owners used to exit businesses is generation to generation. Well, guess what, that’s less than 10%. Now, kids don’t want their parents business anymore.

Aaron Spatz  22:08

I’ve seen that firsthand. I’ve seen like, I’ve seen what I call and I and people will understand us this is not meant in any disrespect. But you’ll see the business that it’s been, it almost feels like it’s been an accidental success. Right? It’s been around for 3040 years, Dad was run the business and he was really really good knows everybody does business with everybody on a handshake and his trend there and they’re there. They’re humming along they’re doing really really well and then goes to try to hand that over to a Son Son isn’t really that interested in in doing that? Or or if he is there’s nothing in place in terms of formal systems and all these other processes and things that they really should be leveraging it’s just been it’s been just been this cash machine for many years. And so it’s it’s really interesting because I think there’s a and I’d love your I love your feedback on this is there’s a lot of people that are trying to retire there’s a lot of people that are in a position where they want to move on and hat like how do they get past that, you know, when there’s not when they haven’t set that up properly. And now they’re in a in their son or their or their family isn’t going to take the business? Like how, how do they navigate that?

Michelle Seiler Tucker  23:17

Well, first and foremost, you know, they gotta align themselves with someone like us and m&a advisor that can help them get their business in position to sell. And they got to be able to be coached. You know, always say you can only grow the owner, as much as you can. I mean, I’m sorry, you can only grow the business as much as you can go the owner, you’ll never go the business passport, you can grow the owner in most cases, unless you have a really good you know, CEO or something that’s a good visionary at the top. you’ve ever watched Marcus Lemonis on CNBC, the prophet. love that show. Yeah, yeah. And so he tells them exactly what you do. Right? Your leaves comes back, do they do what He told him to do?

Aaron Spatz  23:59

Sometimes,

Michelle Seiler Tucker  24:00

very seldom. They never do what he tells us to do the complete opposite. Yeah, he tells them

Aaron Spatz  24:09

to build, they’ll go put things back the way they had a previous he sunk like, you know, whatever it was 50,000 or $500,000 into the business to get things refurbished and rebranded and packaged and laid out and then he comes back yeah, they come back in, you know, eight weeks later or something. And it’s like, what what happened to the new sign I just put out in front of your business or whatever, right? It’s, it’s it’s nuts, but you’ll see the ones that actually followed his advice. Yeah, they beat they become the featured story of like, Hey, look at these guys. They’re they’ve grown. You know,

Michelle Seiler Tucker  24:41

so back to my original philosophy. Yeah, grow the business past what you can go the owner, right when I said it earlier to 70% of businesses that have been in business 10 years or longer gone out of business, because they’re married to original idea. They’re married to that sign. They’re married to that name. They’re married to that brand and they’re married. So all that stuff and Sometimes you got to dig deep and find out why is that it’s not always because the business is so good is because that’s maybe that’s all they have, you know, you got to go back in their life and check out their baggage, you know, and check out their baggage and deal with it on a more emotional level to see if you can get to what’s inside their baggage and why they’re sabotaging and why they’re making decisions against what you advise them to do. I have clients that do that. I had a company that did that. We’re selling a company for 30 $30 million. He decides the seller decides to leave his wife why he’s married. That seller decides to leave his wife force on his business, who by the way on half the company and marry his high school sweetheart while he’s still married to his wife, which A is not legal. Then I have a Catholic a catastrophic injury at one of their locations and multiple locations. And then he falsified records, worker’s comp. So then he ended up bankruptcy court I got to put this a stalking horse $30 million company and signed 1.2 million. Oh my god, sabotage sabotage. So that’s why I say you will never go the business past what you can grow the owner right? So owners can’t change your mindset. You know, you got to align yourself with somebody who can see things that you’re not seeing I always say it’s it’s hard to read the label from the inside of the bottle inside an outsider’s perspective to read the warning signs that keep you out of the danger zone.

Aaron Spatz  26:29

That’s really good. I’m gonna borrow that for sure my quote Yeah, I will credit you I will absolutely credit you. And I’ll and I’ll tell them that they that they need to go by exit rich. So the let’s go back. So let’s go back to when you first formed your your your company and you’re getting things going helped me understand in those early days. What What was the biggest difference maker for you in terms of getting your business moving? heading in the right direction? You’re so it seems like you’re pivoting away from from franchises and working in the m&a space like what what was that? What was that journey like for you? Like when when did you realize that this is sustainable? This is something that I can build, like I can create my own systems and processes and hire some really awesome people like, what what did that look like for you on? You know, year one, year two?

Michelle Seiler Tucker  27:21

Well, you know, I tell you, the very first conference I went to very early in deciding I wanted to be an m&a was a convention m&a convention, I walked in the door number like 3000. Man, me. Everyone turned around and looked at me, like, Oh, you’re not you’re in the wrong conference. I’m like, No, I’m not. Wrong. I’m right. So I’ve been dealing in a man’s world for over 20 years. It used to be 100%, male dominated now. I think it’s 98% male dominated. So you know, that was different. That was challenging, because I had to convince my sellers, why I’m the best, you know, and why they should be working with me over all the other male of buyers advisors. So that was challenging, but I’m a good salesperson, I’m the closer. Yeah,

Aaron Spatz  28:13

well, and that’s just part of your differentiation strategy, right? There is like, Hey, your, your, your your one. You’re the one in 100. You know, so

Michelle Seiler Tucker  28:23

yeah, one in 3000. And so and so then I, you know, started transitioning out of franchising. I was still in franchising, we’re going a little over 20 years back. I also owned other companies. So I’ve always owned multiple businesses. So I didn’t like all of a sudden, bam, I’m doing m&a. And I got everything set up, you know, there was some growing pains. There are some growing pains, hiring the right people, because this is a tough industry. There has always been growing, growing pains, getting good agents, good advisors, because it’s a tough industry. And, you know, there’s growing pains, you know, working with the right clients, trying to get the clients listen to you trying to get the clients down to drive their business into bankruptcy court. So there’s always been different growing pains like that, I think, you know, when things started to turn around for me, and m&a was when I wrote my first book, like I said, Sell your business for more than it’s worth in 2013. And I couldn’t mentor, I’ve never had a mentor before I was like, 2012 2013, I got a mentor, you know, for the very first time started speaking on stages, and I think that’s when things started really turning around. I’m really respected in this industry. In fact, I’m on the panel to speak at these different conferences, and really respected in my industry.

Aaron Spatz  29:45

That’s really cool. And like being so really like you’re able to, you’re able to use the book and kind of help Springboard you into like, establishes greater credibility. Get your name out there, there’s more people aware of who you are and what you do, and then they’re able to or contact your firm. And you know, you and your team are then working with them. And then, you know, good news makes good news travels, right? And so then you’ve got people have a good experience with you. And they refer business your way. And so I mean, it’s a great, I mean, it’s a great, great way to move through that. And so,

Michelle Seiler Tucker  30:17

and that was tough to I mean, it was tough. It was tough. Like, when you’re an m&a, it’s tough to get the word out, because it’s not like we sell a business, and we can go blast it all over the internet. Because it’s private, it’s not potluck. And we have that the consent of everyone involved. And a lot of times, buyers and sellers don’t want to get that consent until years later, because the sellers are still part of the transaction. You know, there’s seller financing involved, there’s an earnout involved, maybe or some retained equity. And so sellers are reluctant to put that public and buyers or two. So we’re really all like the best kept secret. There’s so many business owners, if you think about it, does this even know what a business Walker is? Or what emerges? Acquisitions advisor? Does?

Aaron Spatz  31:05

That’s crazy. Yeah. It’s I mean, it’s like, if you’re worried there’s, there’s a, there’s a few different industries, where it’s, I mean, the, the identities of people are have to kind of be close held. And so I mean, that creating massive marketing problem for you, in terms of getting into specific case studies, right? People want to see case study, they want to say, Hey, show me what you’ve done. And do that for me, you know, and so it’s, then it forces you to kind of get a little bit more vague, because you can’t obviously can’t talk specific details and specific numbers, but but you can draw kind of trends, right? You can you can, you can extract some themes. It very, there’s that there’s ways to get around, I guess, is what I’m trying to say

Michelle Seiler Tucker  31:48

unfortunate for me, fortunate for me back then is actually owned, and I still own MC, legal, medical legal marketing company. And I deal with a lot of attorneys, and I got a lot of referrals, from business for business owners, from my attorney, friends, you know, way back in the beginning, so my sales pipeline filled up pretty quickly, luckily. But that’s why I wrote 20. That’s why I wrote my book in 2013. Just for exposure, because you know, like I said, it’s hard to publicize what we do. So exposure and credibility and Legion. Yeah, but I will exit rich to educate. I really well, excellent educate. And, you know, I have so many case studies of business owners who have pre ordered exit rich and downloaded the, the electronic book that we mailed to them right away. So anybody that buys a book, we email in the electronic version right away. And they printed out one gentleman print out ledger paper, and he’s using it as a workbook. highlighting everything is right everywhere. He called us the other day, and he said, This is the best business book he ever read. And he said, He’s integrating, you know, my concepts, strategies, techniques into his growth strategy and into his exit plan. And he wants us to represent him on his deal. And he owns a pharmaceutical company, and will probably could sell it in a 30 to 50 million range where here’s a very sophisticated entrepreneur, who’s who’s really grown a pretty good company. But there’s so many things you didn’t know. You don’t know what you don’t know.

Aaron Spatz  33:23

Right? Yeah, I mean, that’s, that’s exactly it, there’s people who I mean, this is their first time doing this, right, they’ve never done this before. And so you’ve seen, you know, 500 700, a 1,001st times with people, I’m sure you’ve got repeat business as well. But you’ve seen a lot of people that have interact with us for the first time they’ve had to do this. And it’s not like you’re gonna do this, although some people do, like some people will do this many, many, many times. But a lot of people this is their, this is the one and only time they will do this. And so you, you have a very unique position in your, in your you’re in a very privileged position where you’re able to see, again, both sides of what’s going on. So let’s, let’s talk about the other side of this, because I think there’s we spent and by the way, I love spending a ton of time talking about the, the the other side of this, but I would love to kind of get a little bit more your perspective on how to pee because I imagine if I’m an investor and I want to go acquire a business, how do I avoid from, you know, how do I avoid overpaying for the business? Or how do I make sure that I’m not walking into something that is going to disintegrate on me 90 days in when you know, and I know there’s clauses and provisions that you can write into these agreements, but like but what are some of the big things that people should be aware of when they go to buy a business?

Michelle Seiler Tucker  34:35

You know, it’s funny because I’ve already written that book, but I haven’t published Oh, no, it is it’s all about that. The acquisition acquisition side it’s all about the buyer side, everything that you need to know on the buy side and everything you should be doing on the buy side. But there’s a lot of things first and foremost, again, on the buy side, you need to find an advisor. You really need to find an advisor I was just my podcast earlier and The host was telling me that one of his friends lost all of his investment. And he said, because the assets, it was an asset cell, and he asked the city what we’re, we’re not free and clear. And I go, Well, did he have an advisor? And he goes, No. And I said, Did they have a lawyer? He said, No, they went to the notary and I got one, there you go. That’s why he lost everything, you can’t do that you have to have an advisor. Number one, the adviser has a good businesses, because most good businesses are going to be having engagement with advisors, m&a advisors, because they want to protect confidentiality, they want to make sure to business value, right, they want to make sure that the you know, they want to make sure that they’re multiple buyers, not one or two or three. And they really, you know, you really should come with an advisor, because that’s where the business is. That’s number one. Number two, the advisor should be doing their job. Yeah, the advisor should not Yeah, I imagine that. That’s right. There’s so many bad ones. Now, the advisor is not an attorney, they’re not a CPA, they’re not a due diligence expert. So don’t think that they are, you have to have a good team I have, I have teams, so I have attorney team, CPA teams trust teams, I have all the teams that I need to represent the buyer or represent the seller or represent the transaction. So you need an advisor and you need a good attorney, you need to make sure, like with us, we make sure our buyers are set up for success, we make sure that all the IP is included. You know, and if the if the business is represented by us, we’ve already taken them through the six PS. Right, we’ve already made sure that they got people in place they got they got management team, they got noncompetes, they got employee contracts, we make sure that they have, you know, those processes, those policy and procedure manuals as also be checklist, you know, we make sure that they’re proprietary, like we have an educational business we’re selling right now. And they’re pretty big, but they never got a federal trademark. I’m like, Listen, before I put you in a market, go get your federal trademark, gotta go get a federal trademark, because you don’t want somebody else to go get it and steal it. And plus, I don’t even know, they don’t even know if their name is really available. And even doing business. And a problem is, if you don’t have a federal trademark, and you receive a cease and desist letter in the mail, you have to hire an attorney spend a lot of money are you going to stop using that company name. And if you have to stop use that company name, guess what happens to your branding? Yeah,

Aaron Spatz  37:39

it starts it

Michelle Seiler Tucker  37:41

changes the valuation dramatically. So we want to make sure that the IP is there, we’ll make sure those trademarks are protected. You know, if they have patents, we also want to make sure that that IP isn’t in a separate entity, a separate LLC. Yeah. And so buyers really have to have a good advisor, because if you have a good advisor, they’re gonna make sure that their business is following. You know what, most advisors don’t do six P’s like it. I mean, that’s sure it’s my stuff. But my point is, we also want to be transparent too. So we tell all of our clients, here’s a good, here’s a bad, here’s the ugly, you know, and we want to let you in everyday has hair on it. And we want to expose our hair at the beginning. Right. And so buyers just got to make sure they’re working with a good advisor. And also buyers, a lot of times we’ll hire us or hire other m&a advisors, just to go search for businesses for them. And then they pay they pay the fee. So instead of the seller paying the fee, the buyer would hire a team like ours, a firm like ours, and we would go find the business and we would, you know, do that due diligence. You know, do the evaluations do everything and expose the business for what it is. I mean, we got a company in Canada right now that heard me speak on a podcast. And a buyer is paying 10x revenues, which is shocking. And they want they heard me and I said we don’t want anybody else who want you. And we want you to represent us with this buyer. So as a buyer, you want to make sure you have the right team, you had the right advisor, you want to make sure you have the right legal team, right CPA team, if you get the right advisor, they have all those other teams Yeah. And then there’s things you want to look for, like you want to make sure that you get the IP and that means everything that means all the domains that means the phone numbers, that means that addresses you know, that means the trademarks or patents. I mean, I’ve seen businesses sell before and keep the IP you want to make sure that they have the federal trademarks and then also contracts. You got to make sure those contracts are transferable. If you’re doing if you’re buying the business as an asset sell another stock which 98% of deals are assets, asset sales, and those contracts are not transferred horrible, then you want to make sure that your your owner, the owner, the seller is going to be able to get consent to transfer for each one of those contracts. If they can’t, then it’s extremely risky. And you probably will need some clawback language from reps and warranties. So and most business owners never have the two sentence transferability clause in their contracts. So contracts are probably one of the biggest things like there was a private equity group that bought a brokerage m&a Advisor Group, this is like decades ago, and I paid millions for this group, I want to say they have like 1500 franchisees, their due diligence team never looked at the franchise contract.

Aaron Spatz  40:42

Oh my gosh,

Michelle Seiler Tucker  40:44

private equity group, oh, there’s stuff like this, that happens every day. private equity group buys a business. I mean, that’s why we have the No, I’m an equity group buys a business pays millions and millions for it. And then, you know, the so called franchisees, and they’re saying, Oh, we’re not transferring any and the private equity cars are like, What do you mean, you’re not transferring? We bought you, we own you. And they’re like, No, it’s an asset sale, we didn’t sign consent to transfer. So then they threw this huge party for all the franchisees and their spouses, family, children, everybody to come to spend 1000s of 1000s of dollars. And the franchisees did not like the private equity group, because they thought they were arrogant, and had no experience. Oh, wow. And so only one transferred over within 120 days, they filed bankruptcy. they sue their entire legal team. She’s so you want to make sure you have a good legal team you want make sure you have a good advisor. But those are some of the things to look for. Just make sure you have the IP, make sure there’s a federal trademark, make sure the patent that you’re buying the entities or you’re also getting the entities that hold IP. Also, don’t ever buy a business without a non compete. If they’re not going to give you a non compete, there’s a reason.

Aaron Spatz  42:02

It’s because they’re starting up some other little stealth project, right?

Michelle Seiler Tucker  42:05

Yeah, don’t ever do it. Make sure you own all the names that belong to that business. I’ve seen business owners, I’ve seen buyers buy businesses. And for whatever reason, the name wasn’t part of the name and a non compete wasn’t part of the sale. And I’ve seen business owners go right across the street and compete. So you want to make again, you’re investing your money, you got to make sure you have an advisor, you got to have a legal team. And the right advisor will do an evaluation, even if I’m not representing the seller, I was still doing evaluation for my buyer

Aaron Spatz  42:36

got a percent? Yeah, yeah. Yeah.

Michelle Seiler Tucker  42:38

I mean, and I’ll look at that business and say, here’s the six fees.

Aaron Spatz  42:42

Right, exactly. You’re using? Yeah, you’re using the answer key right to inform what that would look like as a you know, as a buyer, whether it’s buy or sell. Right. So I mean, that makes that makes totally

Michelle Seiler Tucker  42:53

the same thing when we represent the sellers, because we always want to set buyers up for success, right? Why we really work with our sellers, to get them operating on all cylinders, and why we make sure it’s non competes and everything. And my seller says they won’t do a non compete, I won’t even take the deal. Yeah. And then you also want the virus, you want to make sure there’s training, you know, if it’s, if it’s a smaller business, and you don’t need the owner to be part of it. If you’re buying 100%, you don’t need the owner to be part of you know, stay on for over one to two years, you want to make sure there’s sufficient training, like maybe they’re gonna be there for six months, you know, and you want to make sure that there is training Attash, make sure you get those contracts. Like I said, also another thing buyers really have to pay attention to is customer base is customer diversification versus customer concentration. Most business owners have 80 follow 8020 80% of the revenues comes from 20% of clients. If you have and I look, I have businesses like this all the time, we’re selling $70 million company right now it’s got 70% Customer concentration. So we can sell them, it’s tough, but we can sell them we just have to find the right buyer who wants to buy that relationship. So but if you’re looking at that, then you probably want some contingencies attached to that to that concentration. Yeah, so if they lose, like we saw a big office supply company that had a lot of government contracts, and some of the contingencies were okay, we’re gonna pay you this much this much upfront, I think it was like 60% upfront, or 67% upfront, but this 30% seller financing, this goes away if you start losing the contracts, so there was a prorated amount attached to each contract for the seller financing, because we want to mitigate the virus risk

Aaron Spatz  44:43

100% that makes that makes makes total sense. I mean, that’s really fascinating. So like, before we wrap up here, I actually want to kind of go just one more angle here with you and then we’ll and then we’ll then we’ll start to wrap up but what advice then would you have for those again, about the industry in general, so that there may be folks that are listening to this that are fascinated by just the mergers and acquisitions industry in general. And so what what advice would you have for for people

Michelle Seiler Tucker  45:10

that sell or tech or offices?

Aaron Spatz  45:13

Okay, there you go got to see me. Yeah,

Michelle Seiler Tucker  45:16

I was opened up an office in Dallas, right? Come see me out of the five day trading program, we have a partnership that we have formulated, that we do with potential office owners potential m&a advisors. We teach them everything they need to know about m&a. We also teach them how to buy sell, fix grow companies, because I don’t just sell companies, I partner with business owners investing my capital, competencies, expertise, resources, we buy businesses and flip them, we sell them, we merge them. So our training course, teaches all of that plus, our corporate does all the heavy lifting, and we do all the evaluations we do all the prospectuses. You know, we do all that. So come see me it is a tough industry. And it’s an industry I would never, never recommend or encourage you to do it alone. Okay. It’s got about 98% failure rate. And, you know, you have to have you have to have working capital two, you know, because it could take a year to sell a business. So it’s not it’s not fast, you know, nothing. Selling companies is faster selling real estate. So much quicker than selling companies. But I will tell you, that the higher the EBIT, da Earnings Before Interest, Taxes, Depreciation Amortization, the quicker to sell usually. Yeah, because there’s more buyers with good businesses and are good businesses to buy,

Aaron Spatz  46:37

right? I mean, that makes that makes total sense. It makes total sense to me. Well, Michelle, it’s been it really has been a sincere pleasure. I really, really appreciate you make some time to be with me. And again, I’m going to point everybody to go check your book out. So go to exit. Exit Rich now.com.

Michelle Seiler Tucker  46:54

Exit Rich book.com. Thank you. Exit rich book, Rich book.com. Some some domain buyer doesn’t want to sell me exit rich. book.com. So the book actually launches. I’ll tell you a bit about the book real quick if that’s okay. Sure. Yeah, please. Steve. Steve Forbes endorsed a book saying extra rich is a goldmine for entrepreneurs as they leave way too much money on the table. And my beautiful, stunning intelligent co author Sharon Lechter wrote Rich Dad Poor Dad with Robert Kiyosaki. She’s a five time New York Times bestselling author you know her obviously you mentioned her earlier. She also is a CPA, financial literacy expert advisor to many different presidents and as a bonus, or a husband as an intellectual property attorney. Oh my gosh, so she writes the mentors corner after each one of my chapters. So she’s my co author, she was the mentors corner and then her husband add some content to this the fourth P which is proprietary, and then Kevin Harrington, original shark on Shark Tank with the foreword and then we have glowing recommendations from like Jack Canfield Chicken Soup for the Soul. Why Victor Hansen, Brian Tracy, Tom Hopkins, Les Brown. We got Brad Sugars from action coach, Brandon Dawson from Grant cardones team. So some just wonderful testimonials and exit rates. So extra rich launches tomorrow on the 22nd. I don’t think this podcast is going to air till the following Wednesday. But I think I’ll still have my bonuses up. Don’t get mad at me if I don’t, but I think I will. So you can go to exit rich books calm for $24.79 they will probably plus shipping at that point plus shipping at that point. But we will give you a lifetime membership but the bonuses are still up we’ll give you a lifetime membership into the extra rich book club. And Aaron there’s so much video content, we doing deep dives and different strategies and techniques I’ve been teaching over the last 20 years, plus documents, documents to operate your business documents to sell your business. So sample employee handbooks, org charts, you know policy and procedure manuals, letter of intent, purchase agreements, due diligence checklists, closing documents, all of the documents you need to operate and sell your business right exit rich book club are therefore we review and your download. And then we’re also giving a 30 day free membership into club CEOs, which is entrepreneurship mastermind where we help business owners pivot and build a sustainable, scalable and sellable business so they too can exit rich when they’re ready. Offer $24.79 Accept rich book.com That’s awesome, tremendous value to AdvoCare tomorrow. Yeah,

Aaron Spatz  49:36

exactly. Well, this has been this has been a it’s been a real treat Michelle and I want to congratulate you on on on your success so far and how much more you’ve got to go and just the the massive impact that you’ve had on people and on businesses and I’m excited for you with this new book launch and all that you have going on. You’re clearly it making a massive impact for people so I want to thank you for that. And thank you for spending spend just a few precious moments with me. I really do really do value that. Thank

Michelle Seiler Tucker  50:05

you. Thank you, Aaron. Thank you so much. And thanks for having me. It’s my pleasure.

Aaron Spatz  50:10

Absolutely. Thanks for listening to America’s entrepreneur. If you enjoyed the show, please leave a review or comment on your preferred social media platform. share it out with friends, family, coworkers, others in your network. And of course, you can write me directly at Erin at Bold media.us. That’s a Ron at Bold media.us So thanks

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